Tuesday, June 29, 2010

Introducing the Rahn Curve

Dan Mitchell thinks the size of the U.S. government is too large.

Monday, June 14, 2010

The economics of the World Cup

It's big money, really big but host countries aren't the biggest winners when it comes to direct benefits.
"The only direct funding a host country receives from the proceeds of the World Cup are the ticket sales and the predetermined amount promised by FIFA for hosting. In the past host countries have banked on tourism to compensate for the costs of infrastructure and new stadiums."

Friday, June 4, 2010

Mercatus Center: Say goodbye to interstate competition

Veronique de Rugy and Stefanie Haeffele-Balch:
In theory, fiscal federalism is a great tool that holds state and local governments accountable for their policy actions. In practice, it hardly exists. The increasing scope of federal programs and grants has largely eroded its impact on policy decisions by state and local government to the point that tax considerations become almost irrelevant in people’s decisions about where to live.
By removing the natural check that mobility imposes on bad state tax policy, those who favor expanding the scope of federal government activity make it difficult to correct bad state tax policy.
All other things being equal, it remains less costly to live or run a business in a low-tax rate state than in a high-tax rate one. However, when the central government imposes an ever-increasing percentage of each taxpayer’s total tax burden, differences in state taxes become less important. In other words, if your main tax burden is going to be the same wherever you live, why bother even moving to another state, especially if you get to deduct your state taxes from your federal ones? Being able to deduct state taxes from the federal burden obviates any differences between the states.
So say goodbye to Tiebout.

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